Sister needs help with mortgage loan

[messengerhot]

Hi guys,
My sister will be moving to San Francisco in around a month. She's a single mom and will be renting an apartment for the first months but she has plans of getting our own home. She's spoken to her bank about a possible mortgage loan but was informed that they don't deal with online freelancers. I'm trying to see if there are reputable credit unions you can recommend in SF? I've heard they are more flexible and lenient when it comes to mortgage loans or any type of loan for that matter. Any info would be greatly appreciated!

[mschrisgo2]

Whoa! That whole plan sounds flawed to me. First of all, the very few homes for sale go far above asking price with many multiples of offers, usually to an all-CASH buyer. And the prices are really outrageous, upwards from $1.1M. Most single mom freelancers can't support that kind of lifestyle.

To answer your question, I don't know anyone who has been able to finance a house here in the bay area through a credit union. Is there a credit union where she is that also works here in California? Most credit unions are based on some affiliation, a group, so that's a place to start.

[Miss Cellane]

I don't know the SF housing market at all, but in general, it is more difficult for freelancers/self-employed people to get mortgages than for people who work for someone else.

First, she should do some research to find out how to counter-act the liability of being self-employed. Usually, that includes getting your credit score as high as possible, saving up for a larger than normal down payment, having a larger amount in savings. She'll need to find out what paperwork lenders are going to want to see and get that together--they'll want income information for at least the past two years.

Then she'll need to shop for a bank that will give her a mortgage.

There is some very basic information here, http://www.bankrate.com/finance/mortgages/how-the-self-employed-get-mortgages-1.aspx, and there is a bit at the end with info about getting a mortgage in California.

[catherine]

Shortly I voluntarily left my corporate job and went freelance I wanted to refinance my home, and I was told I couldn't do it until I had two years of tax statements as a freelancer. I waited the two years, and and luckily the interest rates stayed low, and at that point I had no trouble refinancing, but I was making a 6-figure freelance income. As others have said, SF is probably one of the most expensive real estate markets in the country. Since she's freelance, can't she move to a more reasonable area?

[jp1]

Miss Cellane, the SF real estate market summed up in one billboard...

http://sf.curbed.com/2016/4/4/11362584/townhomes-advertise-millions-sf-sign

[messengerhot]

Everyone, I really do appreciate all the input. I'm glad that I'm not alone in thinking that her plan is a bit crazy. She just recently became a single mom since the husband passed away 8 months ago so, I understand why she wanted to move to a different city and start anew.

She used to work for a publishing firm but decided to stay at home and do freelance writing. If I'm not mistaken, that was about 3 years ago. She has a good credit score with money saved in the bank and emergency funds set up but might not be enough for a new house in an expensive city. She's got friends in SF, reason why she wants to move there so bad. I might be able to talk her out of it but I doubt that she'll listen.

Real estate prices are huge in California! She phoned me as early as 5 am that a friend of hers told her she can get a mortgage loan from either Pacific Service credit union or Calcoast which offer fixed mortgage rates in California (https://www.calcoastcu.org/borrow-home-purchase-fixed-rate-mortgages.htm) and welcomes freelancers with open arms. This statement alone made her decide that she can afford California with 2 growing kids. I love her and trust that she can make it; however, I agree that she might need more time to do a bit of research on this and a month isn't enough.

P.S: Emailed her the links by Miss Cellane and jp1. Thank you guys. Hope it helps my case in desuading her to pursue California in a month's time.

[messengerhot]

Shortly I voluntarily left my corporate job and went freelance I wanted to refinance my home, and I was told I couldn't do it until I had two years of tax statements as a freelancer. I waited the two years, and and luckily the interest rates stayed low, and at that point I had no trouble refinancing, but I was making a 6-figure freelance income. As others have said, SF is probably one of the most expensive real estate markets in the country. Since she's freelance, can't she move to a more reasonable area?

I hope she considers other areas that aren't as expensive as SF. But as of now, she really has her heart set on SF. I'm still trying to come up with a solid argument on why she shouldn't move to SF LOL. Unfortunately, she's smarter than me and easily shuts me down. :D

[iris lilies]

I would love to live in SF, too, but I can't afford it.

OP your sister is a grown up and will make her own decisions. Who knows, perhaps she will find a path in SF that works for her. But it is the last place I would move if I could work online and I had two children and a modest income.

No need to argue against it, just make sure you aren't subsidizing the foolishness.

[Miss Cellane]

Miss Cellane, the SF real estate market summed up in one billboard...

http://sf.curbed.com/2016/4/4/11362584/townhomes-advertise-millions-sf-sign

Good heavens.

We actually have a few houses in my city that are at or around the million dollar mark--new builds that advertise as "waterfront," meaning that they are on a river which will allow you to take your boat out to the ocean--probably takes 10-15 minutes in a boat with an engine. And there's an historic showpiece of an Arts and Crafts mansion, built in the 1800s by a very rich businessman that recently sold for $7.5 million. But the average house in my neck of the New Hampshire woods is still about $250,000-$300,000 for a 3-4 bedroom 1880s Victorian near the center of town (the most sought-after houses if you aren't seeking something brand new).

The new houses that are cropping up all over as people try to escape the Massachusetts prices/taxes are too close together, not very well built, have very few windows (seriously, both the "sides" of the house have no windows, just the front and back), and are very expensive. But if you want central air and an "open" floor plan, that's what you buy. When spending less could get you a larger, but older house on a larger lot, more conveniently located and far and away better construction. But even then, we are talking $500,000, not even close to a million.

And I thought the East Coast was expensive.

[SteveinMN]

When we went to refinance our current mortgage, our credit union (which held the original note) told me they needed at least two years documentation of income from my business before they would even let us apply. They were tighter on the credit than the outfit we went with -- Quicken Loans -- but, by then, I had some steady income coming in (not two year's worth, though). She might do better with a national lender like QL.

But, personally, I think she's being wildly optimistic. I'm sure there are cheaper neighborhoods in SF, but I'm not sure I'd want to live in them.

[JaneV2.0]

I browsed on line for condos in Walnut Creek last year--a lovely little suburb of SF, on the BART line. At that time they were much more reasonable than SF itself. She might try looking there. Also, she could consider FSBOs.

[catherine]

They were tighter on the credit than the outfit we went with -- Quicken Loans -- but, by then, I had some steady income coming in (not two year's worth, though). She might do better with a national lender like QL.


My refi was with Quicken Loans also, and I've been very satisfied with them. They made it very easy. They even came to the house for the closing, which I've never experienced before with other closings I've had.